The Citizens Utility Board (CUB), a consumer group, says 9 out of 10 smartphone users are paying too much for data plans. CUB Executive Director David Kolata joins us on Chicago Tonight at 7:00 pm with information on how you can cut costs on your cell phone bill.
On July 7, Verizon Wireless decided to stop selling unlimited data plans, an increasingly popular decision among carriers, and one already made by AT&T and T-Mobile. With Sprint as the only major company to continue offering unlimited data plans, the Citizens Utility Board (CUB)—a nonprofit utility supervisory organization founded by the Illinois Legislature—studied phone bills to determine how this news affects consumers.
On Tuesday, the CUB released their findings in the “CUB’s Guide to Cell Phone Data Plans”, a guide designed to complement the CUB Cellphone Saver. After examining 19,000 bills over three years, the CUB concluded that 70 percent contained an average of $331 in unused minute, texts, megabytes and service.
“Wireless carriers are forcing everyone to shop at what amounts to the cell phone industry’s big and tall store,” said CUB Executive Director David Kolata. “Unfortunately, the suit doesn’t fit and customers are pouring hundreds of dollars a year into bulky data plans that aren’t tailored to their needs.”
Most smartphone users only use a small portion of the data offered by most plans. For instance, Verizon now offers $30 to $80 per month for 2 GB to 10 GB of data respectively.
However, a study analyzing 11,000 Verizon bills nationwide that the CUB performed with Validas—a Houston, Texas company that created the software behind the Cellphone Saver—reveals that smartphone owners use, on average, 456 MB a month.
Consequently, these customers might be paying as much as $23.16 a month—$278 a year—for data that they never use. In fact, over 96 percent of the smartphone users in the study needed less than the 2 GB of data each month Verizon offers in the company’s smallest and cheapest data plan.
At the moment, Verizon’s change of plans will only affect new customers, and the company has established a few new ways users can keep track of their data. Customers can dial #DATA to receive a free text message with their data usage information, or use either My Verizon Mobile or My Verizon online to monitor it. Verizon also has a Data Usage Calculator online for customers, and even a Data Usage Widget available for download.
Smartphone users will even receive text messages when their data usage goes beyond 50, 75, 90, 100, and 110 percent of their plans’ monthly amount. Of course, customers can also turn this feature off. For tips on how to keep your data charges down on Verizon, click here.
Despite these offerings, the CUB wants more from carriers.
The CUB believes wireless companies need to implement the following three reforms in order to serve customers more fairly:
Lower tier data plans. Specifically, offer a 500 MB or 1 GB plan, which would provide enough data for most users.
Offer family share plans. A 2 GB plan would fit the needs of four average smartphone users, and likely with data to spare.
Offer rollover data. Customers should have every opportunity to use the data they pay for, or they should be able to exchange it for reward points and billing discounts.
The “CUB’s Guide to Cell Phone Data Plans” and the CUB Cellphone Saver are both available for free on the CUB’s site. The former helps consumers determine how much data they use and outlines the major carriers’ current offers so they can make an informed decision. The latter allows AT&T, Sprint, T-Mobile, and Verizon customers to upload an online copy of their bill and receive a report laying out ways to save money on their voice, text, and data plans.
“Wasted gigabytes are causing our bills to skyrocket,” Kolata said. “It’s time for the cell phone industry to match the way customers use their phones.”